The Euro Depreciated &Nbsp, And Export Enterprises Actively Hedging Risks.

Recent pairs

Euro hedging increases

Yesterday, the first financial daily learned from several Chinese and foreign banks that before the outbreak of the European debt crisis, the appreciation of the renminbi against the US dollar was expected to be higher. The import and export enterprises made mainly financial products for avoiding exchange rate risks.

The devaluation of the euro has caused business in Europe to be in a quagmire.

He Jianliang, general manager of Wilke Trading (Jiaxing) Limited, told reporters yesterday: "since the beginning of March, the euro has been falling. Now the profits of enterprises have dropped by 15%~20% compared with the previous ones.

If the euro continues to fall, the business that exports to Europe is likely to be "uprooted".

Chen Hanye, sales director of Standard Chartered Bank (China) Limited, told reporters yesterday that recently, due to the expected warming of the RMB appreciation and the sharp depreciation of the euro triggered by the sovereign debt crisis in the eurozone, many enterprises have become more active in the operation of the hedging business, such as raising the value of the hedge ratio and diversities in product selection.

Chen Han Ye gave an example of an enterprise fixed.

Chen Hanye also stressed that if the euro rose, the company would lose its forward contracts.

However, because the contract price is already higher than the cost of the company, the company can also guarantee a profit of 1.90%, thus ensuring the long-term and steady development of the company's business.

Limited financial instruments

Due to the fact that China has not yet opened the RMB options market, the derivatives are relatively limited, and the hedging products are mainly based on US dollars and RMB hedging products.

The common foreign exchange hedging products include forward foreign exchange trading, parity forward FX trading and structured forward trading.

He Jianliang told reporters that his company also avoided foreign exchange losses through financial instruments such as forward settlement, but he thought, "financial instruments can not solve the fundamental problem of exporting European enterprises, but only to avoid some losses of enterprises.

We have started looking for trade opportunities in Japan, Korea and other countries.

Lu Zheng commissar, a senior economist at Xingye Bank's capital operation center, estimates that if the renminbi appreciation rate continues to maintain at around 10% annually, the growth rate of China's exports to the euro area will decline to a single digit year. If the appreciation rate continues to maintain at 10%~20%, there will be a single digit negative growth in exports to the euro area; if the appreciation rate is maintained at 20%~30%, then the export will have a two digit negative growth year on year.

A Chinese investment bank also told reporters that because the RMB exchange rate policy is not yet clear, banks choose to "stay put" and wait for the RMB exchange rate policy to be clear before deciding the direction of business.